Ellington Credit Co (EARN) News & EventsEARNEllington Credit Co

EARN Reports 8% Economic Return in Q2

"The second calendar quarter validated the actions we took in response to the first quarter market dislocation," said Laurence Penn, Chief Executive Officer and President. "The market selloff early in the year enhanced the CLO opportunity set, and we responded by rapidly deploying the proceeds from our March unsecured note offering while actively repositioning the portfolio. Although net investment income for the quarter did not yet fully reflect our expanded and repositioned portfolio, we generated a quarterly economic return of 8% (non-annualized), grew NAV per share, and enhanced our future earnings capacity. As market conditions stabilized during the quarter, we refined our portfolio to upgrade credit quality and improve long-term return potential. In mezzanine debt, we rotated out of lower-coupon, shorter-spread-duration positions trading near or above par and into higher-coupon, wider-spread investments with stronger underlying credit fundamentals. In CLO equity, we added longer-tenor, higher-cash-flow structures while reducing exposure to shorter-tenor positions with greater sensitivity to loan price volatility. We also benefited from several refinancings and resets of existing CLO equity positions, enhancing both near-term cash flows and long-term earnings power. Looking ahead, we believe that the market dynamics that emerged during the second quarter - including higher reinvestment yields, improving credit fundamentals, and a more constructive technical backdrop - continue to favor active portfolio management. We expect net investment income to grow as we deploy the excess liquidity held at quarter end, selectively increase leverage, and rotate the portfolio toward higher-yielding investments. Combined with our active trading capabilities, flexible balance sheet, and disciplined hedging strategy, EARN is well positioned to generate attractive risk-adjusted returns for our shareholders."

Ellington Credit Outperforms Peers in Q1 2026

"The first calendar quarter of 2026 was marked by continued headwinds and volatility in the CLO market," said Laurence Penn, Chief Executive Officer and President. "For Ellington Credit, while as previously communicated our NAV declined during the quarter, our up-in-credit bias and active trading again drove outperformance versus peers. We believe that a significant portion of the market weakness was technical-driven by overall sentiment and elevated yield spreads in the corporate credit markets, rather than by fundamental credit deterioration. We selectively leaned into the resulting opportunities, prioritizing CLO mezzanine debt over equity while staying disciplined by adding incremental hedges along the way. We also enhanced our capital structure, taking advantage of a narrow market window at the end of March to issue unsecured debt. Following quarter end, we used most of the debt offering proceeds to make new CLO investments, with deployment substantially complete by the end of April, thus positioning us for future earnings growth. The offering has also meaningfully strengthened our balance sheet, as we used a portion of the proceeds to refinance repo financings, replacing short-term secured debt with long-term unsecured debt."

Ellington Credit Company Launches Public Offering of Unsecured Notes Due 2031

Ellington Credit Company announced the commencement of an underwritten public offering of unsecured notes due 2031. The public offering price, interest rate, and other terms will be determined through negotiations between the Fund and the underwriters. The 2031 Notes have been rated 'BBB' by Egan-Jones Ratings Company, an independent rating agency unaffiliated with the Fund. The Fund intends to grant the underwriters a 30-day option to purchase additional 2031 Notes at the same price and on the same terms and conditions to cover overallotments, if any. The Fund expects to use the net proceeds from the offering for general corporate purposes, including funding purchases of additional assets in accordance with the Fund's investment objectives and strategies and repaying short-term borrowings under reverse repurchase agreements, which the Fund uses to finance many of its investments. The 2031 Notes are expected to be listed on the New York Stock Exchange and to trade thereon within 30 days of the original issue date under the ticker symbol "ELLA". Piper Sandler & Co. is acting as the lead book-running manager for the offering. Lucid Capital Markets and A.G.P./Alliance Global Partners are acting as joint book-running managers; B. Riley Securities, Clear Street and Muriel Siebert & Co. are acting as lead managers; and Wedbush Securities is acting as co-manager for this offering.